Brexit: The 5 huge issues Britain and EU must settle

A year after Britons shocked the continent by voting on June 23 to cut loose from their main export market, new debate within Prime Minister Theresa May's cabinet on precisely what kind of trading relationship to pursue has perplexed European Union leaders, who warn time is tight to agree terms before Britain leaves in 2019. That's why we will work all the time with the United Kingdom and never against the UK. The leaders are also likely to shape more clarity on the UK-EU relationship post the exit and the nature of trade deals between them.

Only when "sufficient, concrete progress" on the first phase has been made will Mr Barnier recommend to the European Council that the negotiations can enter the next stage, taking in the future trading relationship, with that recommendation possibly coming at October's summit of EU leaders.

"We must lift the uncertainty caused by Brexit, we want to make sure that the withdrawal of the United Kingdom happens in an orderly manner, then in a second step we will scope our future partnership", the French politician said. "The position we have agreed today is completely consistent with our long-standing position we have set out on article 50".

Barnier said they wanted to agree on the "main principles of the key challenges of the UK's withdrawal as soon as possible", including Britain's exit bill, the rights of European Union citizens in Britain and the future of Northern Ireland.

He said those were the rights of expatriate citizens and problems of a new EU-UK border, notably cutting across Ireland. He had struck a conciliatory tone in an earlier statement, emphasising Britain and the EU's "shared European values".

According to Barnier, the intention on behalf of the European Commission is to keep talks as transparent as possible.

He explained that Theresa May, the Prime Minister, would brief fellow European Union leaders at a summit on Thursday on the UK's approach to the rights of expatriate citizens, which will be set out in detail in a paper on Monday.

They said discussions would be split into three stages: citizen rights, the single financial settlement and other separation issues.

"I think the whole process will lead to a happy resolution which can be done with honor and profit to both sides".

Both sides were determined to give the talks a positive spin, with Mr Davis and Mr Barnier exchanging mountaineering gifts - a walking stick and a book on hiking - ahead of the all-day meeting. "And fair means that we want to keep the British as close as possible to the European Union  but never at the price that we divide the remaining 27 European Union states". "We will work all the time with the UK, and never against the UK", Barnier said.

In addition to the working groups, a "dialogue" has been established to deal with the Irish border issue, under the authority of Barnier and Davis' right hands, Sabine Weyand and Olly Robbins. An early election this month, in which Prime Minister Theresa May lost her majority, only added to the problems.

Quoting Winston Churchill, Davis said in response: "A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty".

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